A congressionally mandated Acquisition Advisory Panel July 25 approved a series of recommendations intended to strengthen competition and boost “transparency” in the government’s acquisition of commercial items and services including orders placed against multiple award contracts.  The most significant recommendations include:

1.  New definition for stand-alone commercial services.  In order to ensure that commercial services are, in fact commercial, the new definition at FAR 2.101 would ensure that only those services that are actually sold in substantial quantities in the commercial marketplace are considered “commercial.”  This would replace the current definition that includes services “of a type” sold in the marketplace where the panel calls for the elimination of the “of a type” language.  When acquiring services not sold in the commercial marketplace, the government would need to follow traditional contracting methods e.g. FAR Part 15, Negotiated acquisitions.

2.  Increasing competition.  The DOD requirements for competing services over $100,000 under multiple award contracts should be applied government-wide.  Such requirements include requiring COs to contact as many schedule contract holders as practicable to ensure at least three responses are received  by holders capable of doing the work and notifying all FSS contractors that for orders over $ 5 million consideration of cost or price is a “significant evaluation factor.”

3.  New IT professional services schedule urged.  The group suggests the General Services Administration should create a new information technology schedule for professional services that relies on competition rather than posted rates to establish prices.  The panel notes while rates play a role in pricing, the price depends more on a level of effort and mix of skills to meet government needs so the GSA should spend less time on negotiating and auditing rates and more time “negotiating key terms and conditions related to services.”

4.  Greater transparency in awards.  Amending the FAR to establish the requirement to publish in FedBizOpps, for information purposes, all sole source task or delivery orders placed under MAS contracts above the simplified acquisition threshold of $100,000 and requiring agencies to provide a post-award debriefing, consistent with FAR 15.506, on all such orders when a statement of work and evaluation criteria were used in making the selection.

5.  Limited use of T&M contracts.  In response to concerns about price competition and contract management the panel suggests (a) current policies limiting use of time-and-material contracts be enforced (b) converting work performed on a T&M basis to performance-based effort, when possible (c) barring use of T&M contracts unless the “scope of effort” is sufficiently defined to allow efficient use of T&M resources and (d) mandating that T&N contracts be awarded competitively, whenever possible.

6.  Ensure price reasonableness when competition is limited or does not exist.  Revise current FAR provisions that permit the government to require “other than cost or pricing data” and conforming the FAR to commercial practices by emphasizing price reasonableness should be determined by competition, market research and analysis of prices for similar items.  These goals would be accomplished by (a) amending statutes addressing price as an evaluation factor to provide that non-price factors should never be “significantly more important than price” (b) statutory change to allow protests of task and delivery orders under MAS when the anticipated value exceeds $5 million (c) revising FAR 12 and 52.212 to include standardized contract terms for acquiring commercial items and services.  The recommendations will be available on the acquisition Advisory Panel Web site at “http://www.acquisition.gov/comp/aap/index.html”   

Though agreeing in certain respects a multi-association coalition of industry groups criticized several of the Panel suggestions saying it would make procurements less efficient, less effective and less fair to all parties and would “return to an era” when the federal procurements simply took to long.  Specific suggestions that were blasted include:

1.  The new definition of stand-alone commercial services.  By eliminating the “of a type” the government would be limiting access to the latest cutting edge products evolving from the commercial sector to only those that are precisely the same as those required by the government.

2.  Allow protest of task and delivery orders above $5 million.  Such protests would hurt the government’s ability to get the work accomplished on schedule and would impose extra costs due to administering and responding to protests.

3.  Required increased competition when using T&M contracts.  Once a sole source
justification has been made then the appropriate contract type should be used, including T&M.

4.  Deemphasize labor rates.  Schedule contracting should focus on the buying agencies’ processes, not providing less structure in which negotiations take place such as eliminating hourly rates in the base contract.

5.  Creating standardized contract clauses.  The use of the litany of government specific standard clauses has been demonstrated to keep commercial firms from competing in the federal marketplace – a result Congress tried to reverse through creating special authorities for commercial items.
 
6.  Price should rarely be less important than non-price considerations.  Such a significant revision should be put up to public scrutiny and extensive public commentary.

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